Snap-on Sales Increase 5% in Q2

The tool manufacturer said its trajectory "may be uncertain" amid ongoing economic turbulence.

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KENOSHA, Wis. — Snap-on Inc., a global manufacturer of tools, equipment, diagnostics, repair information and systems solutions, on Thursday announced operating results for the second quarter of 2022.

Net sales of $1.13 billion in the second quarter increased $55.2 million, or 5.1%, from 2021 levels, reflecting an $87.6 million, or 8.4%, organic sales gain, partially offset by $32.4 million of unfavorable foreign currency translation. Operating earnings before financial services for the quarter of $246.6 million compared to $217.1 million in 2021.

As a percentage of net sales, operating earnings before financial services of 21.7% in the second quarter improved 160 basis points from 20.1% last year. Financial services revenue in the quarter of $86.4 million compared to $86.9 million in 2021; financial services operating earnings of $65.3 million compared to $68.9 million last year.

Consolidated operating earnings for the quarter of $311.9 million improved to 25.5% of revenues (net sales plus financial services revenue) as compared to $286.0 million, or 24.5% of revenues, last year. The second quarter effective income tax rate was 23.8% in 2022 and 23.3% in 2021.

Net earnings in the quarter of $231.5 million, or $4.27 per diluted share, compared to net earnings of $208.0 million, or $3.76 per diluted share, a year ago.

“We’re encouraged by our second quarter results, which not only demonstrate our upward trajectory in sales, profitability and earnings, but also represent new highs achieved in these uncertain macroeconomic and geopolitical environments,” said Snap-on Chairman and CEO Nick Pinchuk. “Despite the turbulence, we have consistently maintained meaningful momentum, as evidenced by our continuing sales growth over the pre-pandemic period of 2019, reaching 19.5% as reported, or 18.7% organically, in the quarter. These are interesting times, but we meet the difficulties of the day fortified by the strengths inherent in our products, our brands, and our people ... considerable advantages that drive clear and consistent progress, even in turmoil.

"We believe that these powerful and singular assets will enable significant gains along our runways for growth, which combined with the improvements delivered by our Snap-on Value Creation Processes, will further extend our ongoing upward trend and will author notable advancements as we go forward. Finally, I want to thank our franchisees and associates for their ongoing contributions, for their unfailing dedication, and for their steadfast confidence in our future.” 

COVID-19 and its subsequent variants, as well as supply chain inefficiencies, continue to impact economic activity worldwide in 2022. The company believes that our markets and our operations possess and, indeed, have demonstrated considerable resilience against the impact of the virus and that there will be ongoing advancement even in the midst of the turbulence. The trajectory, however, may be uncertain due to the evolving nature of the situation. 

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